G. Madanlal vs P. Padma Bai

T. Sathiadev, J.—Defendant is petitioner. Respondent/plaintiff Filed the suit based on a promissory note dated 7th May, 1982 for Rs.

16,887. Defendant put forth the claim that she had entrusted her jewels to plaintiff''s husband, who was having a safety vault, and on his death,

plaintiff was having possession of the jewels, and therefore, unless the jewels are returned, the suit claim is not maintainable. As defendant came

forward with a claim that the jewels were kept as security for the loan taken, the court below held that there was a triable issue and hence, ordered

deposit of Rs. 1,500 to be made on or before 16th November, 1983 failing which, the petition for leave to defend would stand dismissed. On the

Court fixing the amount at Rs. 1,500 this revision had been preferred stating that even the said condition ought not to have been stipulated.

It is not in dispute that the suit had been decreed ex parte on 17th November, 1985. This order granting leave to defend was ordered on 24th

October, 1984. Mr. Raghupathi, learned Counsel for the respondent, would submit that as the suit itself had been decreed ex parte, the present

revision petition filed on 30th July, 1985 by applying for the copy of the order oh 17th November, 1984, the date on which the decree was

passed, is not maintainable.

Mr. N.S. Varadachari, learned Counsel for the defendant, submits that the order passed stipulating a pre-condition for leave to be granted is an

order, which would finally dispose of the suit filed as against him, if he does not comply with the condition within the time stipulated by court, and

therefore, the present case comes within one of the exceptions in the proviso to Section 115(1), C.P.C. He, therefore, contends that, when an

order granting leave to defend conditional on payment of security is open to revision, and as such grant of leave touches the jurisdiction of court as

held in The New Ashapuri Co-operative Housing Society Ltd. and Another Vs. Arvindkumar Manilal Patel, , the resultant decreeing of the suit on

failure to comply with the condition is a consequential order and when the earlier order passed is beset with material irregularities, this Court could

still hear the revision petition and pass suitable orders thereon.

Mr. Raghupathi, in his turn, by relying upon the decision in Lala Lal Singh Vs. Seth Shobhagchand, , would plead, that after the amendment

effected to Section 115, C.P.C., under Central Act 104 of 1976, neither the earlier decision in Major S.S. Khanna Vs. Brig. F.J. Dillon, , nor the

other decisions referred to in that decision, could he of any avail to defendant. He submits that, as soon as the decree had been passed, there is no

power to deal with any of the conditional or interlocutory orders, passed pending disposal of the suit; and the only course open to defendant is to

look for remedies by way of appeal. As held in The New Ashapuri Co-operative Housing Society Ltd. and Another Vs. Arvindkumar Manilal

Patel, , a conditional order granting leave to defend, touches on the Jurisdiction of the court. Hence, it is a revisable order. If the condition is not

complied with, it results in a consequential order of the suit being decreed. If it be found that the earlier order passed suffers from material

irregularity and requires to be set aside, then the consequential order has to necessarily disappear. This is precisely the view taken by a Division

Bench in Siri Krishan Bhardwaj Vs. Manohar Lal Gupta and Another, , by holding that when the leave is refused to the defendant to appear and

defend the suit under Orders 37, C.P.C., the effect of it is that, the allegations in the plaint would stand admitted. It is on that basis the decree

follows, but when the earlier order is set aside, the later order passed in the meanwhile must also fail and to that effect, directions will have to be

given.

A learned single Judge in Lala Lal Singh Vs. Seth Shobhagchand, , with reference to a proviso to the amended Section 115, C.P.C. had taken

the view that in view of the amendment to Section 115(2) by Central Act 104 of 1976, the earlier decision in Major S.S. Khanna Vs. Brig. F.J.

Dillon, , would have no applicability. He held that, after the amendment, the true position which emerges is that, Section 115(2) prevails upon Sub-

section (1) of that section. It was a case in which a preliminary decree for dissolution of a partnership was earlier passed, and subsequently a final

decree came to be passed after rejecting the objections, and thereby, by applying the concept of merger in the final judgment or decree. It was a

case wherein no revision would lie, as against the earlier order.

The first aspect to be considered in view of the amended provision, is to find out, whether the order under revision is one which would come

within the ambit of Section 115, as now amended. In Section 115(1) by the 1976 Amendment Act, it is stated that the High Court shall not vary or

reverse any order of the subordinate court, except where an order which is made against the revision petitioner would have finally disposed of the

suit or other proceeding, or if allowed to stand would occasion a failure1 of justice or cause irreparable injury to him. If an appeal lies against such

an order, then the revisional power cannot be exercised u/s 115(2), Civil Procedure Code.

The order passed by the Court below is not one as against which an appeal could lie. It is only as against the consequential order resulting in an

ex parte decree being passed, an appeal lies. But the order granting conditional leave touches upon the jurisdiction aspect, and if a court fails to

exercise the said jurisdiction legally or commits material irregularity, then u/s 115(1)(c) it is a revisable order. Even then, it has to be seen whether it

would come within the proviso to Section 115(1). By not complying with the condition, which according to the defendant was uncalled for, it had

resulted in the final disposal of the suit. Certainly, on such non-compliance, it had led to a consequential order of an ex parte decree being passed.

Hence, Sub-clause (c) to the proviso applies to the instant matter.

The defence was that the jewels have been given by way of security, and without returning them, the suit claim is not maintainable. This plea had

found acceptance by the court below, and it held that a chance to defend the suit should not be denied. Apart from claim of sufficient security given

by way of entrustment of jewels, and when a counter claim is put forth for the return of the jewels, there was no question of directing some amount

to be deposited for grant of leave. The suit claim was for Rs. 16,887 and the condition imposed was Rs. 1,500. This by itself shows that it has

been arbitrarily fixed, on having found that leave deserves to be granted. Hence, there has been a material irregularity in the exercise of jurisdiction

in imposing the said condition in an arbitrary manner. The requirements as pointed out in Mechelec Engineers and Manufacturers Vs. Basic

Equipment Corporation, , do not exist.

Therefore, when the said order suffers from jurisdictional error, merely because consequent to such an order a decree had been passed on 17th

November, 1984, it cannot be held that this revision petition has become infructuous. As held in Siri Krishan Bhardwaj Vs. Manohar Lal Gupta

and Another, , there will be a direction to restore the suit and dispose it of on merits.

It is stated that the amount of Rs. 1,500 has since been deposited it is to be kept to"" the credit of the Suit.

Hence, this revision petitioner is allowed resulting in restoration of the suit to the file of the trial Court, and has to be disposed of on its own

merits, No costs.